Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Gazprom Share Restrictions Could Be Lifted Before May

Russia will decide in May how it will liberalize its gas market but may allow free trade in shares of gas monopoly Gazprom before that date, a government official said on Friday.

"The Cabinet will meet in March [to discuss gas market liberalization] and in May a decision will be taken," Economic Development and Trade Deputy Minister Andrei Sharonov told reporters.

"But it will not be a decision on when the market will be liberalized, but one on creating a market and an infrastructure, on changing the price-setting policy. An assessment will be made whether liberalization should be carried out quickly or slowly."

"Liberalization is inevitable in a market economy," Sharonov said. "But it should also open access to the pipeline... and competition in output," Sharonov said.

The output by independent gas producers had reached 7 percent to 9 percent of total gas production in Russia, he said, while Gazprom's share fell to 88 percent from more than 90 percent over the same period.

Sharonov said that since the government, Gazprom and its subsidiaries have successfully acquired more than 51 percent of Gazprom shares, this would help to make the decision on share trade liberalization easier.

"After the share consolidation chances are we can solve the problem earlier, before a liberalized [gas] market is set up," Sharonov said.

At the moment, Gazprom share trade is ruled by the so-called "ring-fence" under which foreigners can only buy Gazprom's American Depositary Receipts.

Sharonov said investors' interests would not suffer from the restructuring.

"Shareholders' interests, local and especially foreign ones, are a sacred cow for us and we will treat this cow with utmost care," he said.